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Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-1
ALABAMA HISTORICAL COMMISSION
ADMINISTRATIVE CODE
CHAPTER 460-X-23
ALABAMA HISTORIC REHABILITATION TAX CREDIT
TABLE OF CONTENTS
460-X-23-.01 Alabama Historic Rehabilitation Tax
Credit
460-X-23-.02 Definitions
460-X-23-.03 Tax Credit
460-X-23-.04 Restrictions On Previous Work
460-X-23-.05 Application Requirements
460-X-23-.06 Application Review Process
460-X-23-.07 Tax Credit Allocation Reservation
460-X-23-.08 Tax Credit Certificate
460-X-23-.09 Project Commencement And Completion
460-X-23-.10 Taking The Tax Credit
460-X-23.-11 Appeals
460-X-23-.12 Commission Reporting
460-X-23-.13 Expiration Of The Tax Credits
460-X-23-.01 Alabama Historic Rehabilitation Tax Credit. The
Purpose of Act 2013-241 of the Alabama legislature and its
amendments and successor legislation is to provide a tax credit
to Alabama taxpayers for the rehabilitation of historic and
certain non-historic buildings in Alabama. This rule shall
become effective December 20, 2013.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.02 Definitions.
(a) Act. Act 2013-241 of the Alabama legislature and
its amendments and successor legislation.
(b) Aggregate Tax Credit Allocation Amount. The
cumulative limit on tax credit allocations as set forth in the
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-2
Act per calendar year. As of October 1, 2013, the aggregate
amount shall be twenty million dollars ($20,000,000) per year.
(c) Applicant. For the purpose of this Program, the
Applicant shall be the Owner of the Qualified Structure for
which tax credits are being applied.
(d) Application. The Application shall consist of
three parts: Part A: Evaluation of Significance, to be used by
the Commission for making a determination whether a building is
a Certified Historic Structure, a Certified Historic Residential
Structure, or a Qualified Non-historic Structure; Part B:
Description of Rehabilitation, to be used by the Commission for
reviewing proposed Projects for compliance with the Secretary of
the Interior’s Standards (Standards); and Part C: Request for
Certification of Completed Work, to be used by the Commission
for reviewing completed Projects for compliance with the work
approved under Part B. The Commission staff will develop the
Application and may modify it as needed over time. All required
forms, including Applications, Part A, B, C and amendment forms,
are available from the Commission at no cost.
(e) Certified Historic Structure. A building located
in Alabama that is certified by the Commission as being
individually listed in the National Register, eligible for
listing in the National Register, or certified by the Commission
as contributing to the significance of a Registered Historic
District. For the purpose of this Program, the term “structure”
means a building or any edifice enclosing a space within its
walls, and usually covered by a roof, the purpose of which is
principally to shelter any form of human activity, such as
shelter or housing, or to provide working, office, parking,
display, or sales space. The term includes, among other
examples, banks, office buildings, factories, warehouses, barns,
railway or bus stations, and stores and may also be used to
refer to a historically and functionally related unit, such as a
courthouse and jail or a house and barn. Functional
constructions made usually for purposes other than creating
human shelter or activity, such as bridges, windmills, and
towers, are not eligible to be Certified Historic Structures
under this definition.
(f) Certified Historic Residential Structure. A
Certified Historic Structure located in Alabama which is or will
be used as a single family, owner occupied residential
structure, either free standing or supported by party walls, but
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-3
not to include individual units within a multi-residential
structure such as a condominium or cooperative.
(g) Certified Rehabilitation. Repairs or alterations
to a Certified Historic Structure or a Certified Historic
Residential Structure that is certified by the Commission as
meeting the Standards, and to Qualified Non-historic Structures
that are certified by the Commission as meeting the Standards
and the following requirements during rehabilitation: at least
fifty percent (50%) of the existing external walls shall remain
in place as external walls, at least seventy-five percent (75%)
of the existing external walls shall remain in place as either
external or internal walls, and at least seventy-five percent
(75%) of the internal structural framework shall remain in
place.
(h) Commencement of Rehabilitation. The date on which
actual physical work contemplated by the Rehabilitation Plan
submitted with the Application will begin. The Applicant shall
incur no less than 20 percent of the estimated costs of
rehabilitation described in the Application within eighteen (18)
months of receiving a Tax Credit Allocation Reservation.
(i) Commission. The Executive Director and staff of
the Alabama Historical Commission, a state agency, and or any
successor to the Alabama Historical Commission. For the purpose
of notifications or filing of any Applications or other
correspondence, delivery shall be made to: Alabama Historic
Rehabilitation Tax Credit Program, Alabama Historical
Commission, 468 South Perry Street, Montgomery, Alabama
36130-0900 (U.S. Mail) or 36104 (courier delivery).
(j) Complete Application. Submission of completely
filled out Parts A and B of the Application that are signed and
dated by the Applicant and accompanied by photographs and site
plan(s), floor plan(s), and elevation drawings and any other
supporting exhibits necessary to accurately convey to the
Commission the scope of all work that is proposed to the
building. The Commission shall also make a determination that
the building is a Certified Historic Structure, a Certified
Historic Residential Structure, or a Qualified Non-historic
Structure before the Application is considered to be complete.
(k) Condition of Information. A qualifier for the
approval of proposed work based on the Commission staff’s review
of an Application where the staff determines that additional
information is needed on certain aspects of the rehabilitation
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-4
Project before a determination can be made to approve or deny
the Application.
(l) Condition of Work. A qualifier for the approval
of proposed work based on the Commission staff’s review of an
Application where the staff determines that certain aspects of
the proposed rehabilitation Project shall be modified or deleted
before a determination can be made to approve the Application.
(m) Department. The Alabama Department of Revenue.
(n) National Register. The National Register of
Historic Places, which is the official list of the nation's
historic places worthy of preservation authorized by the
National Historic Preservation Act of 1966 and administered by
the National Park Service, a bureau of the U.S. Department of
the Interior.
(o) Owner. A taxpayer filing a State of Alabama tax
return or any entity that is exempt from federal income taxation
pursuant to Section 501(c) of the Internal Revenue Code, as
amended, that owns title to a Qualified Structure or owns a
leasehold interest in a Qualified Structure for a term of not
less than 39 years.
(p) Project. A Project includes all work to a
Property for which rehabilitation tax credits are sought, the
scope of which is fully described in an Application Part B and a
Rehabilitation Plan. For the purpose of these Regulations, all
work completed on a building in addition to all work to a
Property for which rehabilitation tax credits are sought is
subject to review for compliance with the Standards during the
period beginning six (6) months before the Application is
submitted and continuing through the end of the recapture period
for any tax credits used.
(q) Program. The Alabama Historic Rehabilitation Tax
Credit Program as authorized by the Act and described in these
regulations.
(r) Property. A Qualified Structure located in
Alabama and its site and landscape features.
(s) Qualified Rehabilitation Expenditures. Any
expenditure as defined under Section 47(c)(2)(A) of the Internal
Revenue Code, as amended, and the related regulations
thereunder, and other reasonable expenses and costs expended in
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-5
the rehabilitation of a Qualified Structure. For Certified
Historic Residential Structures, this term shall mean expenses
incurred by the taxpayer in the Certified Rehabilitation of a
Certified Historic Residential Structure, including:
preservation and rehabilitation work done to the exterior of a
Certified Historic Residential Structure; repair and
stabilization of historic structural systems; restoration of
historic plaster; energy efficiency measures except insulation
in frame walls; repairs or rehabilitation of heating, air
conditioning, or ventilation systems; repairs or rehabilitation
of electrical or plumbing systems exclusive of new electrical
appliances and electrical or plumbing fixtures; and
architectural, engineering, and land surveying fees. Qualified
rehabilitation expenditures do not include the cost of
acquisition of the Qualified Structure, the personal labor by
the Applicant, enlargement of the Qualified Structure, or any
cost associated with the rehabilitation of an outbuilding of the
Qualified Structure, unless the outbuilding is certified by the
Commission to contribute to the historical significance of the
Qualified Structure.
(t) Qualified Non-historic Structure. A non–historic
building located in Alabama built before 1936 that is certified
by the Commission as not meeting the eligibility requirements as
a Certified Historic Structure or a Certified Historic
Residential Structure and that is certified by the Commission as
meeting the requirements contained in Section 47(c)(l)(a) and
(b) of the Internal Revenue Code, as amended. For the purposes
of these regulations, non–historic structures built before 1936
shall not include residential buildings.
(u) Qualified Structure. Certified Historic
Structures; Certified Historic Residential Structures; and
Qualified Non-historic Structures.
(v) Rehabilitation. Rehabilitation means the process
of returning a building or buildings to a state of enhanced
utility, through repair or alteration, which makes possible an
efficient use while preserving those portions and features of
the building and its site and environment which are significant
as defined by Part A of the Application approved by the
Commission.
(w) Rehabilitation Plan. Descriptions, construction
plans, and specifications for the proposed rehabilitation of a
Qualified Structure in sufficient detail to enable the
Commission to evaluate compliance with the Standards.
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-6
(x) Registered Historic District. Any district listed
in the National Register or any district which is: a)
designated under Alabama or local law certified by the U.S.
Secretary of the Interior as containing criteria which
substantially achieves the purpose of preserving and
rehabilitating buildings of historic significance to the
district; or b) certified by the U.S. Secretary of the Interior
as meeting substantially all of the requirements for the listing
of districts in the National Register of Historic Places.
(y) Request for a Tax Credit Allocation Reservation.
The submittal of Parts A and B of the Application for a
Qualified Structure.
(z) Reservation Priority List. A list prepared and
maintained by the Commission of the order in which completed
Applications are received for review and reviewed.
(aa) Standards. The Secretary of the Interior’s
Standards for Rehabilitation as defined by Title 36 Code of
Federal Regulations (CFR) Part 67.7.
(bb) Substantial Rehabilitation. Rehabilitation of a
Qualified Structure for which the qualified rehabilitation
expenditures exceed 50 percent of the Owner's original purchase
price of the Qualified Structure or twenty—five thousand dollars
($25,000), whichever is greater. For the purpose of these
regulations, the Owner's original purchase price of the
Qualified Structure shall mean the original purchase price of
the Property minus the value of the underlying land and any
buildings other than the Qualified Structure for which
rehabilitation tax credits are being applied.
(cc) Tax Credit Allocation. The dollar amount of tax
credits apportioned for the substantial rehabilitation of a
Qualified Structure based on a Rehabilitation Plan approved by
the Commission.
(dd) Tax Credit Allocation Reservation. The
reservation of a tax credit allocation issued by the Commission
via a written form or letter for a Project for which a complete
Part A and B of the Application has been submitted, which
entitles the owner to a tax credit provided that the owner
complies with all of the requirements of the Act for the
issuance of a Tax Credit Certificate. For the purpose of the
definition, Part A of the Application shall also have been
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-7
reviewed and a determination made by the Commission that the
building is a Certified Historic Structure, a Certified Historic
Residential Structure, or a Qualified Non-historic Structure.
(ee) Tax Credit Certificate. A certificate issued by
the Commission via a written form or letter to the Applicant
providing information about the Project and the amount of its
Tax Credit Allocation to be filed with the Applicant’s Alabama
state tax return. If there are multiple owners of a property,
or if the owner is a partnership or limited liability company,
the Tax Credit Certificate will contain a section to be
completed by the Owner that provides the percentage or amount of
credit that will be allocated to each partner, member or owner,
and such completed Certificate may be provided to the department
to transfer all or any portion of the tax credits passed through
to the partner, member, or owner in accordance with
460-X-23-.03(6). A copy of the completed Certificate shall be
filed with the partner’s, member’s, or owner’s respective
Alabama tax return. The aggregate credits claimed by the
partners, members, or owners may not exceed the total amount of
the credit set forth in the Applicant’s Tax Credit Certificate.
Authors: Chloe Mercer, David Schneider, Jennifer Bailey
Statutory Authority: Act 2013-241; Act 2014-452.
History: New Rule: Filed December 13, 2013; effective
December 20, 2013. Amended: Filed September 3, 2014; effective
October 8, 2014.
460-X-23-.03 Tax Credit.
(1) A tax credit of twenty-five percent (25%) of
qualified rehabilitation expenditures is available against any
state tax due that is specified in the Act for the Certified
Rehabilitation of Certified Historic Structures and Certified
Historic Residential Structures. This credit is available for
both income-producing buildings and owner-occupied residential
buildings.
(2) A tax credit of ten percent (10%) of qualified
rehabilitation expenditures is available against any state tax
due that is specified in the Act for the Certified
Rehabilitation of Qualified Non-historic Structure. This credit
is available for non-residential income-producing buildings
only.
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-8
(3) Rehabilitation of a Qualified Structure shall be
substantial as defined by the term Substantial Rehabilitation
contained in section 460-X-23-.02.
(4) The tax credit may be used by the Owner of the
Certified Historic Structure, Certified Historic Residential
Structure, or a Qualified Non-historic Structure.
(5) Eligible expenditures include reasonable expenses
and costs expended in the Certified Rehabilitation of a
Qualified Structure as defined by the term Qualified
Rehabilitation Expenditures in section 460-X-23-.02. Eligible
expenditures do not include: the cost of acquiring any interest
in a Qualified Structure or its Property; any expenditure
attributable to the enlargement of an existing building; and
site work expenditures, including any landscaping, sidewalks,
parking lots, paving, decks, outdoor lighting remote from the
building, fencing, retaining walls, or similar expenditures
because they are not considered made in connection with the
rehabilitation of a Qualified Structure.
(6) The Applicant shall not be permitted to request
the review of another property in the place of the property
contained in the Application. All or any portion of the tax
credits under this Act shall be transferable and assignable,
subject to any notice and verification requirements to be
determined by the Department, without the requirement of
transferring any ownership interest in the qualified structure.
However, once a credit is transferred, only the transferee or
transferees may utilize such credit and the credit cannot be
transferred again. The transferee or transferees of the tax
credits may use the amount of tax credits transferred to offset
any state tax due under Chapters 16 and 18 of Title 40.
(7) For the purpose of these regulations, dates of
notification or issuance of any decisions, actions, requests for
information, billing for fees, and other correspondence by the
Commission shall be in writing and the date of the notification
or issuance shall be stated. The notification or issuance is
effective as of the stated date and not the date of receipt by
the Applicant.
Authors: Chloe Mercer, David Schneider, Jennifer Bailey
Statutory Authority: Act 2013-241; Act 2014-452
History: New Rule: Filed December 13, 2013; effective
December 20, 2013. Amended: Filed September 3, 2014; effective
October 8, 2014.
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-9
460-X-23-.04 Restrictions On Previous Work. Before beginning any
substantial rehabilitation work on a Qualified Structure, the
Applicant shall submit an Application and Rehabilitation Plan to
the Commission and an estimate of the qualified rehabilitation
expenditures under the Rehabilitation Plan. The Applicant may
incur qualified rehabilitation expenditures no earlier than six
months before the submission of the Application and
Rehabilitation Plan that are limited to architectural,
engineering, and land surveying fees and related soft costs and
any costs related to the protection of the Qualified Structure
from deterioration. All such work shall be described in Part B
of the application and shall meet the Standards. If the
Commission determines that any of said work is not consistent
with the Standards, the Part B will be denied. For the purpose
of these regulations, the protection of the Qualified Structure
from deterioration shall mean emergency or temporary measures
necessary to prevent water penetration, deter vandalism, or
stabilize building components likely to otherwise collapse.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.05 Application Requirements.
(1) A complete Application, including both Parts A
and B, shall be submitted to the Commission for all Projects
before commencing rehabilitation and as a requisite for the
Commission issuing a Tax Credit Allocation Reservation. Part C
of the Application shall be completed at the completion of work
and is a requisite for the Commission issuing a Tax Credit
Certificate. Applications are available from the Alabama
Historical Commission. The Applicant shall sign each part of the
Application and shall certify that the information provided is,
to the best of the Applicant’s knowledge, correct. Specific
Application requirements are included in the Instructions and on
each part of the Application.
(a) Application Part A - Evaluation of Significance:
Part A of the Application certifies that a building is a
Certified Historic Structure, a Certified Historic Residential
Structure, or a Qualified Non-historic Structure and shall be
completed for all buildings to be included in the Project. Part
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-10
A of the Application is evaluated against criteria for
significance and integrity issued by the National Park Service
for the National Register. Areas of significance include an
association with events, activities, or developments that were
important in the past or; with the lives of people who were
important in the past or; with significant architectural
history, design, or engineering achievements.
(1) An Applicant may file Part A of the Application
with the Commission at any time before or simultaneously with
the Part B.
(2) Part A shall include enough information to
determine whether a building is eligible for designation as a
Certified Historic Structure, a Certified Historic Residential
Structure, or a Qualified Non-historic Structure. The Part A
shall include, among other information: an accurate street
address or description of the location of the building; the name
of the building’s Applicant and the Applicant’s address and
telephone number; a description of the general setting and an
architectural description of the building, including the
exterior and the interior; a brief history of the building; a
statement describing why the building is eligible for
designation as a Certified Historic Structure, a Certified
Historic Residential Structure, or a Qualified Non-historic
Structure; color photographs printed on photographic paper
showing general views and all features discussed in the
description; and a map indicating the location of the building.
(3) Applicants are encouraged to contact Commission
staff in the development of Part A of the Application when
buildings have not been previously determined to be eligible for
the National Register.
(b) Application Part B – Description of
Rehabilitation: Part B of the Application certifies that
proposed rehabilitation work is consistent with the Standards
and shall be completed for all Projects. Part B may only be
submitted with Part A of the Application or after Part A of the
Application has been submitted to the Commission. The Commission
shall issue a Tax Credit Allocation Reservation via a written
form or letter upon submission of a complete Part B of the
Application along with a Commission determination that the
building is a Certified Historic Structure, a Certified Historic
Residential Structure, or a Qualified Non-historic Structure
based upon a review of Part A of the Application.
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-11
(1) Part B of the Application shall include, among
other information: an accurate street address or description of
the location of the building; the name of the Applicant and the
Applicant’s address and telephone number; a Rehabilitation Plan
including drawings of the site plan and the building’s floor
plans showing existing conditions and all proposed work with
elevation drawings if applicable to illustrate any new
construction, alterations, or additions; and additional photos
printed on photographic paper, as necessary, to completely
illustrate all areas of the building that will be affected by
the Rehabilitation Plan. Drawings of the existing building
condition and drawings of proposed Project are necessary to
review Part B of the Application for all Projects. For Qualified
Non-historic Structures applying for the ten percent (10%)
credit, drawings shall show that fifty percent (50%) or more of
the existing external walls remain as external walls; that
seventy-five percent (75%) or more of the existing external
walls remain in place as internal or external walls and; and
that seventy-five percent (75%) or more of the existing internal
structural framework is retained in place.
(2) Part B of the Application shall also state the
timeframe by which all work included in the Project will be
completed. The Application will state a projected starting date
and completion date for the Project. The difference between the
two dates will be the timeframe by which the project shall be
completed. All work must be completed based on that timeframe
calculated from the actual starting date.
(3) Part B Rehabilitation Plans are reviewed by the
staff of the Commission for consistency with the Standards. The
Standards are as follows:
(i) A property shall be used for its historic purpose
or be placed in a new use that requires minimal change to the
defining characteristics of the building and its site and
environment.
(ii) The historic character of a property shall be
retained and preserved. The removal of historic materials or
alteration of features and spaces that characterize a property
shall be avoided.
(iii) Each property shall be recognized as a physical
record of its time, place, and use. Changes that create a false
sense of historical development, such as adding conjectural
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-12
features or architectural elements from other buildings, shall
not be undertaken.
(iv) Most properties change over time; those changes
that have acquired historical significance in their own right
shall be retained and preserved.
(v) Distinctive features, finishes, and construction
techniques or examples of craftsmanship that characterize a
property shall be preserved.
(vi) Deteriorated historic features shall be repaired
rather than replaced. Where the severity of deterioration
requires replacement of a distinctive feature, the new feature
shall match the old in design, color, texture, or other visual
qualities and, where possible, materials. Replacement of
missing features shall be substantiated by documentary,
physical, or pictorial evidence.
(vii) Chemical or physical treatments, such as
sandblasting, that cause damage to historic materials shall not
be used. The surface cleaning of structures, if appropriate,
shall be undertaken using the gentlest means possible.
(viii) Significant archaeological resources affected by
a Project shall be protected and preserved. If such resources
must be disturbed, mitigation measures shall be undertaken.
(ix) New additions, exterior alterations, or related
new construction shall not destroy historic materials that
characterize a property. The new work shall be differentiated
from the old and shall be compatible with the massing, size,
scale, and architectural features to protect the historic
integrity of the property and its environment.
(x) New Additions and adjacent or related new
construction shall be undertaken in such a manner that if
removed in the future, the essential form and integrity of the
historic property and its environment would be unimpaired.
(c) Application Part C – Request for Certification of
Completed Work: Part C of the Application certifies the
completed work follows the Standards and the Rehabilitation Plan
as approved by the Commission in the Part B review. Part C may
be submitted when the substantial rehabilitation is complete.
Part C of the Application shall include, among other
information: an accurate street address or description of the
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-13
location of the building; the name of the building’s Applicant
and the Applicant’s address, telephone number, and taxpayer
identification number or social security number; and photographs
printed on photographic paper of completed work showing similar
views of the photographs provided in Parts A and B. A complete
Part C also requires the submittal by the Owner of cost and
expense certification and an appraisal as more fully described
in Section 460-X-23.08.
(2) Amendment Sheet. Changes to the Project not
anticipated in the original Application shall be submitted to
the Commission on an Amendment Sheet. The Amendment Sheet shall
include, among other information: an accurate street address or
description of the location of the building; the name of the
building’s Applicant and the Applicant’s address, telephone
number, and taxpayer identification number or social security
number; indication regarding which part or parts of the
Application is being amended; and photographs printed on
photographic paper or other drawings or exhibits that illustrate
the proposed changes to the Project.
(3) Functionally Related Structures. For
rehabilitation projects involving more than one Qualified
Structure where the structures are judged by the Commission to
have been functionally related historically to serve an overall
purpose, these buildings will be treated and reviewed as
functionally related structures per guidance provided in
applicable Department of the Interior regulations Title 36 Code
of Federal Regulations (CFR) Part 67.4 relating to functionally
related structures.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.06 Application Review Process.
(1) Delivery. Applications for the Program will be
accepted beginning on October 1, 2013 and continuously
thereafter. Applications should be delivered to the Commission.
(2) Project Review Priority. Applications for Tax
Credit Allocation Reservations are placed on a Reservation
Priority List in the order in which they are received and will
be reviewed in that order. Complete Applications that include
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-14
Parts A and B and all attachments will be eligible for a Tax
Credit Allocation Reservation in that same priority order.
Incomplete Applications will be removed from the list.
Applications received on the same day will be ordered in a
lottery. All Applications received on or before 5:00 p.m.
Central Daylight Time on October 1, 2013 will be considered to
have been received on that date. The lottery shall be conducted
by assigning sequential numeric characters to the Applications.
The same sequential numeric characters will be written on
identical white plastic balls measuring approximately 1.5 inches
in diameter (a standard table tennis ball) and placed in a box
of sufficient size to allow for the mixing of the balls when the
box is shaken. Afterward, a member of the Commission staff shall
blindly and randomly select one ball at a time and its
corresponding number will be sequentially entered onto the
Reservation Priority List. Three Commission staff persons will
be present at the drawing, and the order of the numeric
characters drawn will be witnessed and recorded by staff. The
Commission’s executive director will certify the review priority
order of the lottery for assignment on the Reservation Priority
List.
(a) Staff Review Order. The staff of the Alabama
Historical Commission will review requests for Tax Credit
Allocation Reservations in the following manner until the
Aggregate Tax Credit Allocation is reached:
1. The staff will review Parts A and B of the
Application to make certain that all information requested on
the forms has been provided. If all the forms are complete, the
staff will proceed to the next review step. If either of the
forms is incomplete, the Application will be determined to be
incomplete, and the Application will be removed from the
Reservation Priority List. The Applicant will be notified of the
Incomplete Application and may reapply, but it will be
considered to be a new Application.
2. The staff will then review Part A of the
Application as more fully described below to determine whether
or not the building in question is a Certified Historic
Structure, a Certified Historic Residential Structure, or a
Qualified Non-historic Structure. After this determination is
made, and complete Parts A and B of the Application have been
received, the Commission will issue a Tax Credit Allocation
Reservation within ninety (90) days and the staff will proceed
to the next review step. If the Applicant submits only Part A of
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-15
the Application, the Commission will notify the Applicant in
writing of its determination.
3. The staff will then review Part B of the
Application as more fully described below for the Project’s
compliance with the Standards.
(3) Application Part A. Part A of the Application
will be reviewed by a Determination of Eligibility Committee
composed of professional staff of the Commission. The committee
will determine if a property is eligible for designation as a
Certified Historic Structure, Certified Historic Residential
Structure, or a Qualified Non-historic Structure. The Applicant
shall be responsible for providing sufficient information to the
Commission by which the Commission’s staff may make a
determination. For the purpose of buildings that are
individually listed in the National Register, the Determination
of Eligibility Committee may appoint a single staff member to
make the determination on Part A of the Application. The
Commission shall notify the Applicant in writing of any
determination it makes after completing the review of Part A of
the Application, including as part of the Tax Credit Allocation
Reservation notification.
(a) If all requested information is not provided or
if insufficient information is provided to make a determination
that a building is eligible for designation as a Certified
Historic Structure, Certified Historic Residential Structure, or
a Qualified Non-historic Structure, the Application is
incomplete and will be returned to the Applicant. If an
incomplete Part A is submitted with Part B of the Application,
placement in the Reservation Priority List will be lost and any
subsequent Application for the Project shall be considered a new
Application.
(b) There is no fee to review Part A of the
Application.
(4) Application Part B. An Application fee is charged
before the review of Part B of the Application for its
compliance with the Standards based on the amount of estimated
Qualified Rehabilitation Expenditures listed by the Applicant on
the Part B Application. The fee is not refundable. Applicants
will be invoiced for the fee upon the issuance by the Commission
of a Tax Credit Allocation Reservation. If the invoice is not
paid within thirty (30) calendar days of the Commission’s
issuance of the invoice, the Tax Credit Allocation Reservation
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-16
will be rescinded. The Application may be resubmitted but it
shall be considered a new Application. The fee is set at one
percent (1%) of Qualified Rehabilitation Expenditures, except
that the fee shall not exceed ten thousand dollars ($10,000.00).
(a) The Commission shall notify the Applicant in
writing of any determination it makes upon completing the review
of Part B of the Application. In reviewing Part B of the
Application, the Commission shall determine if the Part B and
the Rehabilitation Plan are:
1. consistent with the Standards;
2. consistent with the Standards with specific
Conditions of Information; Applications found to be consistent
with the Standards with Conditions of Information shall correct
all the conditions within thirty (30) days of receipt of the
Commission review by submitting said corrections to the
Commission; otherwise the Application will be determined to be
not consistent with the Standards;
3. consistent with the Standards with specific
Conditions of Work; Applications found to be consistent with the
Standards with Conditions of Work shall provide written
acceptance to the Commission of all Conditions of Work within
thirty (30) days of receipt of the Commission review, otherwise
the Application will be determined to be not consistent with the
Standards; Applications found to be consistent with the
Standards with Conditions of Work may proceed with work but will
only be eligible for the credits if the conditions listed are
met as part of the rehabilitation work but failure to follow the
conditions may result in a determination by the Commission that
the project is not consistent with the Standards; or
4. not consistent with the Standards; Applications
found to be not consistent with the Standards at any time will
be considered to be incomplete Applications and the Tax Credit
Reservation for the Project will be rescinded and the Project
will be removed from the Reservation Priority List; the
Commission shall make recommendations to the Applicant that
might bring the Project into compliance with the Standards,
however no warranty is made that the recommendations will bring
the Project into compliance with the Standards; the Applicant
may reapply and it will be treated as a new Application and will
be subject to a new Application fee.
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-17
(5) Application Part C. The Applicant shall file Part
C of the Application upon completion of the Project. The
Commission shall review and approve Part C, and the Project
shall meet all other requirements of these regulations before
the Commission can issue a Tax Credit Certificate for the
Project.
(a) The Commission will review the Part C and will
verify compliance with the Approved Rehabilitation Plan. If the
completed Project is found to be in compliance with the Approved
Rehabilitation Plan and any conditions, and with the Standards,
the Commission shall approve the Project. The Commission shall
notify the Applicant in writing of any determination it makes
upon completing the review of Part C of the Application.
(b) Within ninety (90) days, the Commission shall
issue to the Applicant a Tax Credit Certificate via a written
form or letter in an amount equivalent to the lesser of the
amount of the Tax Credit Allocation Reservation or twenty-five
percent (25%) of the actual qualified rehabilitation expenses
for Certified Historic Structures or Certified Historic
Residential Structures, or ten percent (10%) of the actual
qualified rehabilitation expenses for Qualified Non-historic
Structures.
(c) If the submitted Part C is not consistent with
the approved Rehabilitation Plan and the Project cannot, in the
opinion of the Commission, be brought into compliance, then the
Commission shall deny the Project and the Tax Credit Allocation
Reservation will be rescinded. No refund of fees shall be
allowed.
(d) If the submitted Part C is not consistent with
the approved Rehabilitation Plan and the Project can, in the
opinion of the Commission, be brought into compliance, the
Commission may issue remedial conditions that will bring the
Project into compliance with the Approved Rehabilitation Plan.
The Applicant shall complete the remedial work and file an
amended Part C within ninety (90) days of the issuance by the
Commission of the conditions for remedial work or within a time
period agreed upon by the Commission and Applicant. If the
remedial work is completed so that the Qualified Rehabilitation
is consistent with the Approved Rehabilitation Plan, then the
Commission shall, within ninety (90) days, issue a Tax Credit
Certificate in an amount equivalent to the lesser of their
amount of the Tax Credit Allocation Reservation or twenty-five
percent (25%) of the actual qualified rehabilitation expenses
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-18
for Certified Historic Structures or Certified Historic
Residential Structures, or ten percent (10%) of the actual
qualified rehabilitation expenses for Qualified Non-historic
Structures.
(6) Amendment Sheet. Changes to the Project not
anticipated in the original Application shall be submitted to
the Commission on an Amendment Sheet and must be approved by the
Commission as consistent with the Standards before they are
included in the Project. The Commission shall review the
Amendment Sheet and issue a determination in writing regarding
whether or not the proposed change in the Project is consistent
with the Program.
(7) Scope of Review. For purposes of the review of
Applications for this Program, the Project scope includes the
entire building, along with any historically associated property
under the same ownership. Individual condominiums or commercial
spaces within a larger historic building are not considered
individual properties apart from the whole. The scope of review
for a Project is not limited to the work that qualifies as an
eligible expense. The review encompasses the building’s site and
environment, as well as any buildings that were functionally
related historically. Therefore, any new construction and site
improvements occurring on the historic property are considered
part of the Project. Likewise, all work completed six (6) months
before the submission of the Application and Rehabilitation Plan
is considered part of the Project, as is any work completed
during the recapture period for the credit.
(8) Commission Review Not Binding on Other Programs.
Determinations that a building is a Certified Historic Structure
utilizing Part A and that a Project is a Certified
Rehabilitation utilizing Parts B and C apply only to the Alabama
Rehabilitation Tax Credit Program and are not binding on any
other local or federal tax credit program. Determinations made
by the National Park Service for National Register eligibility
or for compliance with the Secretary of the Interior’s Standards
for federal rehabilitation tax credit Projects are likewise not
binding on the Commission although the Commission may take the
determinations into consideration as part of their review of a
Project.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-19
460-X-23-.07 Tax Credit Allocation Reservation.
(1) Once the Commission has determined that Parts A
and B of the Application are complete, the Commission will issue
a Tax Credit Allocation Reservation in the amount based on the
estimated qualified rehabilitation expenditures provided by the
Applicant on the Part B of the Application. Tax Credit
Allocation Reservations will be issued in the order that its
request is listed on the Reservation Priority List.
(2) Supplemental Tax Credit Allocation Reservation.
In the event the amount of qualified rehabilitation expenditures
incurred by the Owner exceeds the amount of qualified
rehabilitation expenditures estimated on Part B of the
Application for the purpose of establishing the Tax Credit
Allocation Reservation, the Applicant may, at any time after
Part B of the Application has been approved for compliance with
the Standards but before the issuance of a Tax Credit
Certificate, apply to the Commission for a reservation of a
supplemental Tax Credit Application Reservation in an amount
equal to the excess. Applications for a supplemental Tax Credit
Application Reservation shall be made on a form prescribed and
available from the Commission at no cost and shall be issued
subject to availability based on the Aggregate Tax Credit
Allocation Amount and the placement on the Reservation Priority
List. For the purpose of placement on the Reservation Priority
List, the request will be considered a new Application and will
added to the next available position on the list. Applicants
who receive a Supplemental Tax Credit Allocation Reservation
will be invoiced for a fee in the amount of one percent (1%) of
the amount of the excess qualified rehabilitation expenditures
unless the Applicant has paid the maximum ten thousand dollar
($10,000.00) fee for the same Project.
(3) Commission Tracking. The Commission shall track
the cumulative amount of Tax Credit Allocation Reservations and
will discontinue issuing Tax Credit Allocation Reservations once
the total has reached the Aggregate Tax Credit Allocation
Amount. When the Aggregate Tax Credit Allocation Amount has been
reached, no further Tax Credit Allocation Reservations will be
made until: 1) additional amounts are returned through the
rescission of Tax Credit Allocation Reservations; or 2) a new
Aggregate Tax Credit Allocation Amount becomes available under
the terms of these regulations. If an Applicant has applied for
a Tax Credit Allocation Reservation that exceeds the remaining
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-20
allocation available under Aggregate Tax Credit Allocation
Amount, the Commission shall issue a Tax Credit Allocation
Reservation in the amount of the available partial allocation
(the "Partial Allocation"), and the amount requested by the
Application that exceeds the Partial Allocation (the "Excess
Allocation") shall remain in the first position on the
Reservation Priority List until additional amounts are available
pursuant to the previous sentence, at which time the Commission
shall issue a Tax Credit Allocation Reservation in the amount of
the Excess Allocation.
(4) Aggregate Tax Credit Allocation Amount Limits.
The availability of Tax Credit Allocation Reservations is
limited to the Aggregate Tax Credit Allocation Amount per tax
year beginning on May 15, 2013 and extending through the
Expiration of tax credits as defined in Section 460-X-23.13. If
all of the Aggregate Tax Credit Allocation Amount for any tax
year is not requested and reserved, any unreserved tax credit
allocations may be utilized by the Commission in awarding tax
credits in subsequent years. No tax credit claimed for any
Qualified Rehabilitation Expenditures may exceed five million
dollars ($5,000,000) for all allowable property types except
Certified Historic Residential Structures and fifty thousand
dollars ($50,000) for Certified Historic Residential Structures.
Applications for the reservation of tax credits will be accepted
beginning October 1, 2013, but no tax credit may be credited
before the taxpayer’s return for the taxable year 2014. All
Applications under this Program shall be received before
May 15, 2016.
(5) Projects Not Likely to Receive a Reservation. The
Commission shall notify Applicants in writing of the status for
Projects that are not likely to receive a Tax Credit Allocation
Reservation because of the Project’s place on the Reservation
Priority List. Applicants will be notified in writing of any
eligibility determination and the Project’s place in the
priority order. The Applicant will have thirty (30) days to
notify the Commission in writing that the Applicant desires to
have the Project remain on the Reservation Priority List. If so,
the Project will remain on the priority list for up to two years
from the date the Application was made. Failure to notify the
Commission will result in the Project being removed from the
Reservation Priority List. The Applicant may re-apply for the
Project, but it will be treated as a new Application.
(6) All Requirements Shall be Met. A Tax Credit
Allocation Reservation reserves a credit in the name of the
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-21
applicant only. However, no actual Certificate of Credit which
can be used by the applicant will be issued until all the
requirements of the program have been satisfied as certified by
the Commission.
(7) Rescission. If a Tax Credit Allocation
Reservation is rescinded, its tax credit allocation will be
returned to the Aggregate Tax Credit Allocation Amount
available. Any Applicant whose Tax Credit Allocation Reservation
is rescinded shall be notified in writing of the rescission by
the Commission. A new Application may be submitted, but it will
be treated as a new Application and will be charged a new
Application fee.
(a) If, at any time, the Commission determines that
the proposed or ongoing rehabilitation work is not consistent
with the Standards, the reservation of tax credits for the
Applicant may be rescinded.
(b) If, at any time, the Commission has reason to
believe that a Project has become inactive or that it is not
likely that it will be able to meet any or all of the
requirements of the Program, it shall notify the Applicant by
registered or certified mail of the Commission’s intent to
rescind the Tax Credit Allocation Reservation. If the Applicant
fails to respond within thirty (30) calendar days receipt of the
notice that the Project is still active, the Commission may
rescind the Tax Credit Allocation Reservation.
Authors: Chloe Mercer, David Schneider, Jennifer Bailey
Statutory Authority: Act 2013-241; Act 2014-452.
History: New Rule: Filed December 13, 2013; effective
December 20, 2013. Amended: Filed September 3, 2014; effective
October 8, 2014.
460-X-23-.08 Tax Credit Certificate. A Tax Credit Certificate
may only be issued by the Commission once its staff has reviewed
Part C and determined that the substantial rehabilitation
follows the Standards and has been completed in accordance with
the Rehabilitation Plan approved by the Commission. In addition,
a Tax Credit Certificate may only be issued by the Commission
once its staff has determined that expenditures incurred with
respect to the Approved Rehabilitation Plan appear to be
consistent with a cost and expense certification: prepared by a
licensed certified public accountant that is not an affiliate of
the Owner, certifying the total qualified rehabilitation
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-22
expenditures and the total amount of tax credits against any
state tax due; and, if the qualified rehabilitation expenditures
exceed two hundred thousand dollars ($200,000), a cost and
expense certification audited by the licensed certified public
accountant. For the purposes of these regulations, the affiliate
shall mean independence for accounting purposes. The cost and
expense certification shall include a certification by the
licensed certified public accountant that the costs and expenses
meet the requirements of this Program. The Commission shall
issue a Tax Credit Certificate once it has received an appraisal
of the Property after rehabilitation prepared by an independent
appraiser who is a Member of the Appraisal Institute (MAI) and
is a licensed real estate appraiser. A separate Tax Credit
Certificate shall be issued for any supplemental Tax Credit
Allocation Reservations that have been granted by the Commission
for the Project.
The Commission shall issue a Tax Credit Certificate once it has
received all Application fees due and the Applicant has met all
other requirements of these regulations.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.09 Project Commencement And Completion.
(1) Applicants shall commence their plan of work and
shall have spent no less than twenty percent (20%) of the
estimated cost of qualified rehabilitation expenditures within
eighteen (18) months of the date of the issuance of the letter
from the Commission granting the Tax Credit Allocation
Reservation [“anniversary”]. The Applicant will notify the
Commission in writing no later than thirty (30) calendar days
after the anniversary that twenty percent (20%) of the estimated
cost of rehabilitation was expended by the anniversary. Failure
to so notify the Commission will terminate the Project and the
Tax Credit Allocation Reservation will be rescinded. The
Applicant may re-apply for the Program, but the Application will
be considered to be a new Application.
(2) A Project’s completion will be the date that it
is placed in service in accordance with these regulations. The
completion date must occur within the timeframe specified in
Part B of the application. The Applicant shall submit Part C of
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-23
the Application in accordance with these regulations and with
the appropriate cost and expense certification within thirty
(30) days of completion.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.10 Taking The Tax Credit.
(1) The Alabama Department of Revenue (Department)
shall grant a tax credit against any state tax due which is
specified in the Act to an Owner holding a Tax Credit
Certificate issued by the Commission, or its partners, members,
or multiple owners as set forth in the portion of the Tax Credit
Certificate completed by the Applicant, or one or more
transferees holding a Tax Credit Certificate issued by the
Department in accordance with Section 40-9F-4(e). This credit
shall be applicable to tax due and payable to the Department by
the owner, transferee, partner, or member under Title 40,
chapters 16 and 18, Code of Alabama 1975, in the amount stated
in the Tax Credit Certificate. The Department shall apply such
credits claimed by the taxpayers only against the portion of
such taxes retained, deposited or distributed to the State of
Alabama. To receive the credit, the Owner of the completed
Project, transferee, partner or member will file the Tax Credit
Certificate with the taxpayer’s Alabama state tax return. For
the purposes of these regulations, a Project’s completion will
be the date that it is placed in service. For the purpose of
these regulations, placed in service generally means that all
work described in an approved Part B Application has been
completed, and the appropriate work has been completed that
would allow occupancy of either the entire building or some
identifiable portion of the building. A Certificate of Occupancy
is one means of verifying the placed in service date for the
entire building (or part thereof).
(2) The Department shall have the right to audit and
reassess any credit improperly obtained by the Owner. This right
extends to the Owner initially awarded the tax credit
certificate, and not any subsequent transferee of the tax
credit certificate or person to whom tax credits have been
passed through pursuant to Section 40-9F-4(d).
Chapter 460-X-23 Historical Commission
Supp. 12/31/14 23-24
(3) The entire tax credit may be taken in the taxable
year in which the Certified Rehabilitation is placed in service.
If taxes owed by the taxpayer are less than the credit, the
amount of the credit may be carried forward for up to ten (10)
additional years. The taxpayer shall not be entitled to claim
any unused credits as a tax refund.
(4) Tax credits granted to a partnership, limited
liability company, or multiple Owners shall be passed through to
the partners, members or Owners, including any not-for-profit
entity which is a partner, respectively pro rata or pursuant to
an executed agreement among the partners, members, or Owners who
have an alternate distribution method, as indicated on the Tax
Credit Certificate to be completed by the Applicant. Any
partner, member or Owner to whom the credits were passed-through
may transfer or assign all or part of their credits to one or
more transferees by providing the completed Tax Credit
Certificate to the Department and otherwise satisfying the
requirements under Section 40-9F-4(e).
(5) Recapture of any of the credit shall apply
against the taxpayer who utilizes the credit, and any required
adjustments to basis due to recapture shall be governed by Title
26, Section 50 of the Internal Revenue code.
Authors: Chloe Mercer, David Schneider, Jennifer Bailey
Statutory Authority: Act 2013-241; 2014-452.
History: New Rule: Filed December 13, 2013; effective
December 20, 2013. Amended: Filed September 3, 2014; effective
October 8, 2014.
460-X-23-.11 Appeals. Applicants or their duly authorized
representatives may appeal any official decisions made by the
Commission. This includes all reservations, approvals, and
denials, made by the Commission with regard to an Application
and Rehabilitation Plan submitted under these regulations.
Appeals are an administrative review and not an adjudicative
proceeding. Appeals must be requested in writing by the
Applicant or duly authorized representative within thirty (30)
days of the receipt by the owner or the owner's duly authorized
representative of the decision being appealed. The Executive
Director of the Commission or his designee shall determine if a
hearing is necessary and if so the appeal will be scheduled
within sixty (60) days of the request. The Executive Director or
his designee will coordinate with the Applicant a date and time
that would be mutually acceptable to both parties. All appeals
Historical Commission Chapter 460-X-23
Supp. 12/31/14 23-25
will be held at the Alabama Historical Commission offices. The
Applicant will have a reasonable opportunity to present
information in support of its appeal. The Executive Director of
the Commission or his designee will then have thirty (30) days
to issue a decision in writing as to whether or not to grant the
request made in the appeal.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.12 Commission Reporting.
(1) In the year in which the Certified Rehabilitation
is placed into service, the Commission shall provide notice of
the Certified Rehabilitation to the taxing authority responsible
for the assessment of ad valorem taxes, along with a copy of the
appraisal provided by the Owner. Upon notification, the taxing
authority responsible for assessing ad valorem taxes shall
complete a new assessment of ad valorem taxes for the tax year
in which the building is placed in service.
(2) The Commission shall, in consultation with the
department, report to the Legislature in the third year
following passage of this act, and annually thereafter, on the
overall economic activity, usage, and impact to the state from
the substantial rehabilitation of Qualified Structures for which
tax credits have been allowed.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.
460-X-23-.13 Expiration Of The Tax Credits. The Program shall
expire on May 15, 2016. Projects that have received a Tax Credit
Allocation Reservation on or before that date will still be
eligible to receive tax credits as long as the Project meets all
other requirements of the Program.
Authors: Chloe Mercer, David Schneider
Statutory Authority: Act 2013-241
History: New Rule: Filed December 13, 2013; effective
December 20, 2013.